The demand for Lebanon’s Tuesday, July 31 eurobond issue, exceeded the expected $400 million offer by the Lebanese government, and reached $750 million, according to AFP news agency.

The eurobond, with seven years to maturity, is co-managed by U.S. investment banks Merrill Lynch and Citigroup’s Salomon Smith Barney subsidiary.

The eurobond will hold a 10.125 percent interest rate—a yield significantly higher than that offered by emerging markets which ranges between 2.5 and 3.5 percent. The issue is intended to replace Lebanese-denominated debt with debt in foreign currency, since the latter carries more favourable interest rates and has longer maturities.

Last month, the Lebanese parliament approved the 2001 state budget, in which the government is allowed to issue up to $2 billion worth of bonds for the purpose of debt restructuring and foreign loans repayments.

Lebanon currently has $6.2 billion worth of eurobonds in international markets, 77 percent of which is subscribed by Lebanese banks. —(MENA Report)